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Joong-Kyum Kim, left, president and chief executive officer of Korea Electric Power Corp., known as KEPCO, received an American Indian pipe as a gift from Strathmore Minerals Corp. CEO David Miller during a ceremony earlier this year announcing a partnership between the two companies to develop uranium mining in the Gas Hills. Strathmore photo

Korean partnership keeps uranium plan on track

Jun 20, 2012 - By Martin Reed, Staff Writer

The Gas Hills area of central Wyoming produced 100 million pounds of uranium during its peak production period in the 1960s and 1970s.

Strathmore Minerals Corp. chief executive officer David Miller envisions a revitalization of uranium mining in the area this decade.

"We think ultimately there are another 100 million pounds recoverable," Miller said, excitement in his voice. "We think the potential for that exists."

In addition to Cameco Resources and other companies, Strathmore is developing its plans in the Gas Hills area for uranium production.

"Employment out there could get up to 300 to 500 people, depending on production levels," Miller said, noting that Strathmore is the largest property owner in the Gas Hills.

Strathmore would account for a large portion of that anticipated production.

"Depending on the price of uranium, our minimum production rate would be at least 1 million pounds of uranium a year," Miller said.

High-paying jobs

The company plans to employ about 100 people after production begins in its planned open-pit

conventional mining operation, he said. They would be "really good jobs," with an average salary of $80,000 annually, he added.

Although the area is not even 100 miles from the company's headquarters in Riverton, a sizeable obstacle stands in the way of Strathmore's production goal.

"It's a battle getting permits in the United States," Miller said. "While the state (of Wyoming) is quite good to work with, the federal agencies can be quite challenging."

Obstacles created by the federal government regarding the state's energy industry hinders progress, he said.

"The federal government is fighting all tax-producing industries" in the state, he said, emphasizing the energy industries.

He remains concerned about potential impacts from the federal government continuing to serve as a detriment to the state's energy industry.

"A federal ban on fracking, of course that will tremendously impact" the state, he said.

The Environmental Protection Agency "designating CO2 as a pollutant could impact coal production in the future."

State control

He wants to see decisions on permitting and regulation that strongly affect Wyoming made by officials and leaders in the state.

"Shift management of all that stuff to Wyoming-based regulators instead of Washington, D.C.-based regulators," said Miller, who also is a member of the Wyoming House of Representatives.

"While the state regulatory process is pretty smooth, there are always glitches with the federal regulatory process," he said.

"It could go better with a strong uranium market," he said. "That would help a lot."

KEPCO partnership

The industry continues to reel from the severe tsunami and earthquake that rocked Japan in March 2011 and crippled the country's Fukushima nuclear plant. With some comparisons to the Chernobyl meltdown in Russia, the Japanese disaster released radioactive materials into the environment.

"It killed us," Miller said about the effect on the uranium industry and specifically Strathmore.

The deal he referenced is Strathmore's partnership with Korea Electric Power Corp., known as KEPCO. The Korean firm is providing the Wyoming company with $8 million from the sale of about 14.6 million shares.

KEPCO will own about 14 percent of Strathmore in the deal that will fund the first phase of exploration and development in the Gas Hills area.

The Korean firm has the option to continue with the project's second phase that would provide $32 million over three years to Strathmore.

"Without that we would be doing minimal work in the Gas Hills this year," Miller said.

Market demand

Uranium demand is continuing worldwide, with the United States leading the charge.

"The U.S. is still the largest uranium consumer in the world," Miller said.

Next year's end of the megatons-to-megawatts program in Russia that converts nuclear weapons into material for energy production could help increase uranium mining, Miller said. "We hope the uranium prices will go up," he said.

Seeing improvements to the American economy would also help the industry's outlook, Miller said.

"We're, of course, worried about the financial situation in the United States," he said. "We have to mine, we have to make, we have to grow to have a strong economy."